Preparing for the future

I am back from the first Asian Chemical and Petrochemical Conference with lots of information on the Indian chemicals industry that I plan to share in the coming days.

The conference, jointly organised by ICIS and the Indian Chemical Council (ICC) at Mumbai, saw over a 100 delegates from India and overseas. For the first time, central and state government representatives from India were present to promote the mega refining and chemical hubs that have been planned.

India’s economic growth has created sufficient excitement among chemical companies with most looking at putting money on the ground to add capacity. They are especially keen to participate in the chemical hubs at Andhra Pradesh, Gujarat, Orissa and Karnataka.

A final clearance for these hubs or petroleum, chemicals and petrochemical investment region (PCPIRs) is expected by January 2008.

The government has committed to spend money to build worldclass infrastructure at the PCPIRs and also offer the facility of shared utilities.

The proposed PCPIRs are brownfield sites and will incorporate plants and projects already underway at these locations. For instance, the PCPIR at Dahej, Gujarat, includes ONGC’s 1.1m tonnes/year cracker and derivatives complex and the one at Paradip, Orissa, is centred on Indian Oil Corp’s (IOC) proposed refinery and cracker.

But there were plenty of questions in the minds of prospective investors. Many wondered if there were sufficient investment opportunities at the PCPIRs as the anchor tenants such as ONGC and IOC have already configured their projects to captively utilise all available feedstocks. Both IOC and ONGC plan to produce PE and PP downstream of their respective crackers.

The other big concern was that anchor tenants have focused only on commodity polymers. Does it not make sense to look at products such as phenol and acrylonitrile rather than just polypropylene?

Foreign investors were worried about bureaucracy especially as the PCPIRs involve both the state and central governments.

I agree that there are many issues that need to be sorted out. But the PCPIRs are at least a step in the right direction.

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2 Responses to Preparing for the future

  1. Adam D'Souza 13 November, 2007 at 6:58 pm #

    Hello Malini,
    I chanced upon your blog.Thanks for taking the time to provide such good information. I have a chemical engineering past and i am yearning to get back into it. I am a NRI based in baltimore and i wanted to seek advice from you if possible.

    thanks,

    Adam

  2. Siddharth 21 December, 2007 at 6:07 am #

    Hi Mani,
    I am looking out for some comprehensive info on the india Chemical and Pertrochemical industry, with specific focus on gujarat, to understand the potential of this sector. could advise where i could get data on this (exports / imports ….)

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